GST Law and Practice Solved Question Paper 2022 [Dibrugarh University BCOM 6th SEM CBCS Pattern]

GST Law and Practice Solved Question Paper 2022
Dibrugarh University BCOM 6^th SEM CBCS Pattern

6^th SEM TDC GST L&P (CBCS) C 614

2022 (June/July)

COMMERCE (Core)

Paper: C-614 (GST Law and Practice)

Full Marks: 80

Pass Marks: 32

Time: 3 hours.

The figures in the margin indicate full marks for the questions

1. (a) Fill in the blanks: 1x4=4

(1) Vijay Kelkar Task Force, 2004 recommended that the integration of indirect taxes into the form of GST in India.

(2) Term ‘Goods’ means movable property, but does not include money and securities.

(3) The full form of GSTIN is Goods and Services Tax Identification Number.

(4) In India, GST is a dual GST system with both Central GST and State GST components levied on the same base.

(b) Write True or False: 1x4=4

(1) GST registration certificate is valid for 5 years.

Ans: False

(2) Every taxpayer is assigned with State wise PAN based GSTIN which is 15-digit long Alpha-numeric number.

Ans: True

(3) There are four types of GST levied in India under GST Laws.

Ans: True, Integrated Goods and Services Tax (IGST), State Goods and Services Tax (SGST), Central Goods and Services Tax (CGST), and Union Territory Goods and Services Tax (UTGST)

(4) The Chairperson of GST Council is the State Finance Minister.

Ans: False, Union Finance Minister

2. Write short notes on any four of the following: 4x4=16

(a) Dual model of GST.

Ans: India has adopted a dual GST system, which was imposed concurrently by the Centre and States as CGST & SGST. Center has the power of tax intra-state sales and states are empowered to tax services.

The implementation of GST has brought about a fundamental shift in the financial relations between the Central Government and the State Governments in India. GST is a unified tax system that replaced multiple indirect taxes levied by both the Central and State Governments. Under GST, both the Central and State Governments share the authority to levy and collect taxes on goods and services. This has led to greater harmonization and uniformity in the tax structure across States, promoting economic integration.

The GST system follows a dual structure, comprising Central GST (CGST) and State GST (SGST), levied concurrently by the Central and State governments, respectively. Additionally, an Integrated GST (IGST) is levied on interstate supplies and imports, which is collected by the Central Government but apportioned to the destination state.

In terms of revenue distribution, the GST Council plays a crucial role. It is a joint forum consisting of the Union Finance Minister and representatives from all States and Union Territories. The Council makes decisions on various aspects of GST, including tax rates, exemptions, and revenue sharing between the Central and State Governments. Except for one decision, all decisions of the Council were taken by consensus.

(b) GST network.

Ans: Goods and Services Tax Network (GSTN) is a not-for-profit, Non-government Company registered under Section 8 of the Companies Act, 2013. GSTN has been promoted jointly by the Central and State Governments, which will provide shared IT infrastructure and services to both central and state governments including tax payers and other stakeholders. The Frontend services of Registration, submission of Returns, Payments, etc. to all taxpayers will be provided by GSTN. It will be the interface between the government and the taxpayers.

Need for Creation of Goods and Services Tax Network (GSTN)

The GST System Project is a unique and complex IT initiative. It is unique as it seeks for the first time to establish a uniform interface for the tax payer and a common and shared IT infrastructure between the Centre and States. During Pre-GST regime, the Centre and State indirect tax administrations worked under different laws, regulations, procedures and formats and consequently the IT systems work as independent sites. Integrating them for GST implementation is complex since it would involve integrating the entire indirect tax system so as to bring all the tax administrations (Centre, State and Union Territories) to the same level of IT maturity with uniform formats and interfaces for taxpayers and other external stakeholders. Besides, GST being a destination based tax, the inter-state trade of goods and services (IGST) would need a robust settlement mechanism amongst the States and the Centre. This is possible only when there is a strong IT Infrastructure and Service back bone which enables capture, processing and exchange of information amongst the stakeholders (including taxpayers, States and Central Government, Bank and RBI). To achieve these objectives GSTN was created.

Services to be rendered by GSTN

GSTN will provide the following services through the Common GST Portal:

1) Provide common and shared IT infrastructure and services to the Central and State Governments, Tax Payers and other stakeholders for implementation of the Goods & Services Tax (GST).

2) Provide common Registration, Return and Payment services to the Tax payers.

3) Partner with other agencies for creating an efficient and user-friendly GST Eco-system.

(c) Input tax credit.

Ans: The word input tax credit is the combination of three words – Input, tax and credit.

Input Means (Sec. 2(59) of the CGST Act, 2017): It means any goods other than capital goods used or intended to be used by a supplier in the course or furtherance of business.

Input Tax Means (Sec. 2(62) of the CGST Act, 2017): In relation to a registered person, it means the Central tax, State tax, integrated tax or Union territory tax charged on any supply of goods or services or both made to him and includes:

(a) the integrated goods and services tax charged on import of goods;

(b) the tax payable under the provisions of Sec 9(3) and Sec. 9(4) of the CGST Act, 2017;

(d) the tax payable under SGST Act (i.e. person liable to pay GST under RCM);

(e) The tax payable under UTGST Act (i.e. person liable to pay GST under RCM),

But does not include the tax paid under the composition levy.

Input Tax Credit (Sec 2(63) of the CGST Act, 2017): It means the credit of input tax. It is deducted while calculating GST liability under regular scheme.

Eligibility for Claiming Input Tax Credit (ITC):

Eligibility for Claiming Input Tax Credit has been mentioned in Section 16(1) of the AGST Act, 2017. According to this section eligibility for claiming ITC is that:

(1) The person must be registered under the GST Act; and

(2) Purchase of goods or services or both made by him are used or intended to be used in the course of furtherance of his business and the said amount shall be credited to the Electronic Credit Ledger of such person.

It should be noted that ITC will not be allowed if depreciation has been claimed on tax component of a capital goods. However, the person must fulfill such conditions and restrictions as may be prescribed and in the manner specified in section 49 relating to payment of taxes, interest, penalty and other amount.

(d) Scope of supply.

Ans: Scope of Supply

As per Section 7(1) Supply includes

(a) all forms of supply of goods or services or both such as sale, transfer, barter, exchange, licence, rental, lease or disposal made or agreed to be made for a consideration by a person in the course or furtherance of business;

(b) import of services for a consideration whether or not in the course or furtherance of business;

(c) the activities specified in Schedule I, made or agreed to be made without a consideration; (w.e.f. 29th Aug 2018 ‘and’ omitted retrospectively from 1.7.2017)

(d) w.e.f. 29th Aug 2018, omitted retrospectively from 1.7.2017: the activities to be treated as supply of goods or supply of services as referred to in Schedule II.

w.e.f. 29th Aug 2018, applicable retrospectively from 1.7.2017

(1A) where certain activities or transactions constitute a supply in accordance with the provisions of sub-section (1), they shall be treated either as supply of goods or supply of services as referred to in Schedule II.”

As per Section 7(2) Supply excludes

(a) activities or transactions specified in Schedule III; or

(b) such activities or transactions undertaken by the Central Government, a State Government or any local authority in which they are engaged as public authorities, as may be notified by the Government on the recommendations of the Council,

Activities specified in Schedule III (i.e. Negative list):

1. Services by employee to employer in the course of or in relation to his employment.

2. Services by court or Tribunal

3. Services by Member of Parliament and others

4. Services by funeral, burial etc.

5. Sale of land/Building

6. Actionable claim other than lottery, betting and gambling.

7. Supply of goods from a place in the non-taxable territory to another place in the non-taxable territory without such goods entering into India.

8. (a) Supply of warehoused goods to any person before clearance for home consumption;

(b)Supply of goods by the consignee to any other person, by endorsement of documents of title to the goods, after the goods have been dispatched from the port of origin located outside India but before clearance for home consumption.”;

(e) Electronic way bill.

Ans: E-way bill is an electronic way bill for movement of goods which can be generated on the GSTN (common portal). A movement of goods of more than Rs. 50,000 in value cannot be made by a registered person without an E-way bill. E-way bill is generated by a unique E-way bill number (EBN) is allocated and is available to supplier, recipient and the transporter.

When should an E-way bill be generated?

E-way bill must be generated when there is a movement of goods of more than Rs. 50,000 in value to or from a Registered Person.

1. E-way bill is an electronic way bill for movement of goods which can be generated on the GSTN (common portal). A movement of goods of more than Rs. 50,000 in value cannot be made by a registered person without an E-way bill. E-way bill is generated by a unique E-way bill number (EBN) is allocated and is available to supplier, recipient and the transporter. However, for certain specified Goods, the e-Way Bill needs to be generated mandatorily even if the Value of the consignment of Goods is less than Rs. 50,000;

2. Every Registered person, being the consignor or consignee or the transporter, as the case may be before movement of goods, should fill the Form GST INS-I.

Unregistered person or his transporter may also choose to generate E-way bill, which means E-way bill can be generated by both registered and unregistered persons. Where a supply is made by an unregistered person to a registered person, the receiver will have to do all the compliances as if he’s the supplier.

A registered person may submit a tax invoice in Form GST INV-1 on the common portal. If a registered person has uploaded the invoice, information in Part A of Form GST INS-1 is auto populated from GST INV-1.

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Also Read: GST Law and Practice Important Questions

3. (a) What is indirect tax? Mention five indirect taxes which have been subsumed in GST. Distinguish between Direct Tax and Indirect Tax. 3+3+8=14

Ans: Meaning of Indirect Taxes: Indirect taxes are those which are imposed on all the goods and services, and not on incomes and profits. Such taxes are collected by the sellers or service provider from their customers. Since consumers are not paying taxes directly to the government, that is why it is called indirect taxes. Example of indirect taxes: Goods and services tax.

According to Hartley,” Taxes which are shifted quickly through commercial competition between consumers are indirect taxes.”

According to Prof. Shirras,” Indirect taxes are those which affect the income and property of persons through their consumption.”

Taxes have been subsumed by GST includes both Central and State Taxes. Following is the list of taxes, both Central and State, subsumed by the GST:

Central Taxes:

a. Central Excise Duty.

b. Duties of Excise (Medicinal & Toilet Preparation).

c. Additional Duties and Excise (Goods of Special Importance).

d. Additional Duties of excise (Textile & Textile Products).

e. Additional Duties of Customs (CVD).

f. Special Additional Duty of Customs (SAD).

g. Central Surcharges and Cesses so far as they relate to supply of goods and service.

h. Service Tax.

State Taxes:

a. State Value Added Tax (VAT)/Sales tax.

b. Central Sales Tax.

c. Luxury tax.

d. Entry tax (All forms)

e. Entertainment Tax (other than the tax levied by the local bodies).

f. Taxes of Advertisement.

g. Purchase Tax.

h. Taxes on lotteries, betting and gambling.

i. State Surcharges and Cesses so far as they relate to supply of goods and services.

Difference between Direct Taxes and Indirect Taxes:

Direct Taxes	Indirect Taxes
The burden of direct taxes is borne by the person on whom it is levied.	The burden of indirect taxes is transferred from the person who pays it, to another person.
Direct taxes income based taxes.	Indirect taxes are supply based taxes.
Rate of direct taxes are different from person to person depending on their earnings.	Rate of indirect taxes are not differ from person to person.
Entire revenue generated from direct taxes goes to Central Government of India.	Revenue generated from indirect taxes is divided between Central Government of India as well as State Governments (i.e. CGST and SGST)
Previous year income assessed in the assessment year.	There is no previous year and assessment year concept in case of indirect taxes.
Central Board of Direct Taxes (CBDT) is an important part of Department of Revenue.	Central Board of Indirect Taxes & Customs (CBIC) is an important part of Department of Revenue.
Direct taxes are progressive nature.	Indirect taxes are regressive nature.
Direct taxes are certain.	Indirect taxes are uncertain.

(b) Explain briefly the history of Indirect Taxes in India. 14

Ans: History of Indirect Taxes in India

The history of Indirect Taxation in India dates back to few centuries and cue of the same is found in Kautilya’s Arthasashtra. During those days, taxes were collected in kind in the form of crop and / or any agricultural product. Such collections were generally ear-marked for some specific purposes or for the development of the State. Taxes were also raised separately for meeting internal and external exigencies like famine, flood, war etc.

Kautilya has also described in great detail the system of tax administration in the Mauryan Empire. It is remarkable that the present day tax system is in many ways similar to the system of taxation in vogue about 2300 years ago. Arthasastra mentioned that each tax was specific and there was no scope for arbitrariness. Tax collectors determined the schedule of each payment, and its time, manner and quantity being all pre-determined.

With the advent of Industrial Revolution in the early 1800’s, European markets were inundated with machine-made material with clothing fabric being the most prominent. The inundation was so intense that selling manufactured item was becoming impossible due to market saturation. Indian market was flooded with British products. Few rare exceptions were there, few products like clothes were also produced in India in cottage industries as for obvious reasons, compared to the imported British products, and prices were lower. At that point only the British thought to impose taxes on India made products. The modern history of indirect taxes starts from the early 20^th century while Excise duty was imposed on Salt, Sugar, Motor Spirit etc. Gradually, the base of Excise duties was increased. The Central Excise Act was formulated in 1944 and thereafter has gone for gradual change year by year.

When the British left India in 1947, they left India with a structure, especially that of revenue, which hasn’t completely changed till now. Also there were reasons why they implemented this structure.

The basic framework for the tax system in independent India was provided in the constitutional assignment of tax powers. The principle of separation in tax powers between the central and state governments is adopted as the basis of policy. Schedule VII enumerates the subject matters of taxation with the use of three lists: List – I: mentioning the areas on which only the parliament is competent to makes law, List – II: dealing with the areas on which only the state legislature can make laws, and List – III: Listing the areas on which both the Parliament and the State Legislature can make laws upon concurrently is provided in Schedule VII. While there are separate heads of taxation provided under this I and II of Seventh Schedule of Indian Constitution, there is no head of taxation in the Concurrent List.

After India got independence in 1947, funds were a major problem for the government for their administration and also to allocate funds for achieving a socialistic pattern of society. As a result, “Excise Duty” introduced during British regime was not abolished but an additional tax known as “Custom Duty” was imposed on imported goods to provide protection to Indian industries across various sectors and to raise additional revenue. But gradually during 1960-1970’s, it was observed that the Indian Technology had become obsolete as compared to their foreign counterparts. The high customs duty had become a protective wall incentivizing low production, obsolete technology although there were other reasons too like license raj etc.

At the above scenarios led India ultimately to a scenario where India did not have Foreign Reserves even to support three weeks of imports. International Monetary Fund (IMF) imposed liberalization as a pre-requisite for providing a bail-out to India which was reflected in the Budget presented by the then Finance Minister Mr. Man Mohan Singh. Liberalization measures also include reduction of import tariffs like the customs duty which led to development of technology within India.

Reforms on taxation in India in notable scale were started by two committees appointed in the 1970s; though the reforms suggested by them were implemented from late 1980s.

L. K. Jha is considered as the architect of the indirect tax reform in India. L. K. Jha Committee was appointed in 1970s, but their suggestions were considered only after decades.

L. K. Jha, who was considered as an accomplished reformer was an Indian Civil Service Officer. He was taught by eminent economists including Lord Keynes (Cambridge) and Harold Laski (LSE) and became the Governor of the RBI. Jha represented a generation of quality educated people opting for Indian Civil Services.

In 1976, Jha suggested VAT in the form of MAN VAT (VAT at the Manufacturing level).

Following Jha’s recommendations a dare move was made by V. P. Singh when he introduced MODVAT (Modified Value Added Taxation) in 1986, when he was Finance Minister. MODVAT was a predecessor of the present day VAT and it was the almost the same MANVAT suggested by L. K. Jha. Initially, it was introduced for selected commodities under the Union Excise Duties (UED).

Few years later, Dr. Manmohan Singh, the architect of economic reforms in India, carried forward from where V. P. Singh left. He extended MODVAT to almost all commodities and reduced excise duty rates. Later, Yeshwant Sinha, the then Finance Minister, introduced a full-fledged VAT for Union Excise Duties (UED) in the name CENVAT in 1999.

In order to persuade the states to rationalize their tax systems, the government of India appointed a State Finance Ministers’ Committee to make recommendations to phase in the VAT within a given time frame. This was later transformed into the Empowered Committee of State Finance Ministers’. The committee’s recommendation that the VAT be implemented in 2003 was postponed repeatedly, until April, 2005. The major landmark in tax reform at the state level was in simplifying and rationalizing the sales tax system the introduction of value added tax in states from 1^st April, 2005. The introduction of the VAT was a major reform exercise, even if it may cause some confusion and uncertainty. The VAT tax base has strengthened the information base for tax administration resulting in improved compliance for other taxes and thereby enhancing the overall productivity of the tax system. VAT was introduced in Assam in the year 2005.

The attempt of a nationwide VAT was an unthinkable one even at the beginning of the new millennium as it means state sales tax and central excise duties and services taxes are to be merged into one. For the states, the sales tax is the largest source of tax revenue.

But still, the advantage of a single tax and its beneficial impact on unifying the economy and promoting economic activities, the first move towards introduction of Goods and Services Tax (GST) in India was made by Atal Bihari Vajpayee government in the year 2000 by initiating discussions with State Finance Ministers. In 2004, Vijay Kelkar suggested a comprehensive GST and in the next year, Mr. P Chidambaram, the then Finance Minister, set launch of GST as a budget goal.

After year of deliberations between sales and centre, GST was introduced in India on and from 1^st July, 2017 where all the states except the state of Jammu and Kashmir joined this mission of “One National One Tax”. However, the state of Jammu and Kashmir also introduced the GST in its state from 8^th of July, 2017.

4. (a) (1) GST is a destination based tax. Enumerate the statement. 7

Ans: Only for Members

(2) What are the features of GST? 7

Ans: GST is a destination based tax on consumption of goods and services, right from the manufacturer to the consumer, to be levied on the same taxable event by both the states and the union government. It is levied at all stages right from manufacture up to final consumption with credit of taxes paid at previous stages available as set off. In a nutshell, only value addition is taxed. The burden of tax is to be borne by the final consumer. Concept of destination based tax is that the GST will accrue to the GST authority which has jurisdiction over the place of consumption. On each ‘supply’ of goods or services or both, there will be a State GST (SGST) as well as a Central GST (CGST).

Features of GST

Salient features of GST are as follows:

1. Dual GST: India has adopted a dual GST system, which was imposed concurrently by the Centre and States as CGST & SGST. Center has the power of tax intra-state sales and states are empowered to tax services. Now GST has extended to all over the India.

2. One Nation One Tax: GST is considered to be the biggest indirect tax reform of Independent India. After introduction of GST, one type of tax is chargeable although with multiple tax rate of different items of goods and services.

3. Exemptions: Apart from providing relief to small-scale business, the law also contains provisions for granting exemption from payment of tax on essential goods and/or services.

4. Inter-State Transactions and the IGST Mechanism: The Centre would levy and collect the Integrated Goods and Services Tax (IGST) on all inter-state supply of goods and services. The IGST mechanism has been designed to ensure seamless flow of input tax credit from one State to another. The inter-state seller would pay IGST on the sale of his goods to the Central Government after adjusting credit of IGST, CGST and SGST on his purchases (in that order). The exporting State will transfer to the Centre the credit of SGST used in payment of IGST. The importing dealer will claim credit of IGST while discharging his output tax liability (both CGST and SGST) in his own State. The Centre will transfer to the importing State the credit of IGST used in payment of SGST.

5. Credit of GST paid on Purchases: The supplier at each stage is permitted to avail credit of GST paid on purchase of goods and or services and can set-off this credit against the GST payable on supply of goods and services to be made by him. Thus only the final consumer bears the GST charged by the last supplier in the supply chain, with set-off benefits at all previous stages.

6. Rates of GST: Currently there are four slabs of GST on the various categories of goods and services. They are 5%, 12%, 18% and 28%.

7. Creating of Unified National Market: Introduction of GST would create unified national market which would facilitate free movement of goods and services across the Country.

8. No cascading effect: Since only the value added at each stage is taxed under GST, there is no tax or cascading of taxes under GST system. GST does not differentiate between goods and services and thus the two are taxed at a single rate.

9. No distinction between goods and services: GST would be applicable on “supply” of goods or services as against the present concept of tax on the manufacture of goods or on sale of goods or on provision of services.

10. Destination based Tax: GST would be based on the principle of destination based consumption taxation as against the present principle of origin based taxation. This implies that all SGST collected will ordinarily accrue to the State where the consumer of the goods or services sold resides.

(b) What was pre-GST regime indirect tax structure? Explain the limitations of pre-GST regime which created base for implementation of GST structure. 7+7=14

Ans: Only for Members

(b) Explain the special provisions of constitutional aspects of GST in India. 14

Ans: Constitutional aspects of GST

The Constitution contains the Union List and the State List within which the power to levy separate taxes is given to the Centre and States respectively. GST was to be levied in such a way that both the Centre and the States received the power to levy and collect it. Further, the legislation had to remain consistent across the Centre and the various State/Union Territory Legislatures. To provide for this, an amendment in the Constitution was necessary.

Constitution (101st Amendment) Act, 2016

In order to suitably implement the GST legislation, this Act resulted in the insertion, deletion and amendment of certain Articles of the Constitution. The following matters were dealt with as a result of these changes:

a) The delineation of powers to levy and make laws with respect to GST

b) The applicability and scope of the GST law

c) The manner of apportionment of revenue from GST among Centre and States

d) The constitution, powers and duties of the GST Council

e) The discontinuation of existing taxes to give way for GST

f) The manner of providing compensation to States for loss of revenue on account of the introduction of GST

Article 246A: Special Provision for GST

This Article was newly inserted to give power to the Parliament and the respective State/Union Legislatures to make laws on GST respectively imposed by each of them. However, the Parliament of India is given the exclusive power to make laws with respect to inter-state supplies. The IGST Act deals with inter-state supplies. Thus, the power to make laws under the IGST Act will rest exclusively with the Parliament. Further, the article excludes the following products from the scope of GST until a date recommended by the GST Council:

- Petroleum Crude

- High-Speed Diesel

- Motor Spirit

- Natural Gas

- Aviation Turbine Fuel

Article 269A: Levy and Collection of GST for Inter-State Supply

While Article 246A gives the Parliament the exclusive power to make laws with respect to inter-state supplies, the manner of distribution of revenue from such supplies between the Centre and the State is covered in Article 269A. It allows the GST Council to frame rules in this regard. Import of goods or services will also be called as inter-state supplies. This gives the Central Government the power to levy IGST on import transactions. Import of goods was subject to Countervailing Duty (CVD) in the earlier scheme of taxation. IGST levy helps a taxpayer to avail the credit of IGST paid on import along the supply chain, which was not possible before.

Article 279A: GST Council

This Article gives power to the President to constitute a joint forum of the Centre and States called the GST Council. The GST Council is an apex member committee to modify, reconcile or to procure any law or regulation based on the context of Goods and Services Tax in India.

Article 286: Restrictions on Tax Imposition

This was an existing article which restricted states from passing any law that allowed them to collect tax on sale or purchase of goods either outside the state or in the case of import transactions. It was further amended to restrict the passing of any laws in case of services too. Further, the term ‘supply’ replaces ‘sale or purchase’.

Article 366: Addition of Important definitions

Article 366 was an existing article amended to include the following definitions:

Goods and Services Tax means the tax on supply of goods, services or both. It is important to note that the supply of alcoholic liquor for human consumption is excluded from the purview of GST.

Services refer to anything other than goods.

State includes Union Territory with legislature.

Compensation to States Under GST

This Act also contains a provision to provide for relief to states on account of the revenue loss to the states arising due to the implementation of GST. It has a validity period of five years. The Goods and Services Tax (Compensation to States) Act, 2017 was born as a result.

What does the Seventh Schedule State?

The Seventh Schedule to Article 246 contains three lists, which contain the matters under which the Union and the State Governments have the authority to make laws.

List – I: Union List - It contains the matters with respect to which the Parliament (Central Government) have the exclusive right to make laws.

List – II: State List - It contains the matters in respect of which the state government has the exclusive right to make laws.

List – III: Concurrent List - It contains the mattes in respect of which both the Central and State Governments have the power to make laws. The relevant entries in this list were adjusted in such a way as to provide for the following:

a) To continue the levy of excise duty by the Centre on manufacture/production of five petroleum products namely: petroleum crude, high-speed diesel, motor spirit, natural gas, and aviation turbine fuel. In addition to the above, excise duty is also levied on tobacco and tobacco products. As a result, tobacco and tobacco products are subject to both excise duty and GST.

b) The power to levy taxes on the five petroleum products was given to the states too.

c) Entertainment tax was abolished except where it is levied by local bodies.

6. (a) What do you mean by valuation of Taxable Services? Provide the format of computation of taxable value and GST on goods. 4+10=14

Ans: Taxable event under GST law is supply of goods or services or both. It means no supply no GST.

The term, “supply” has been inclusively defined in the Act. The meaning and scope of supply under GST can be understood in terms of following six parameters, which can be adopted to characterize a transaction as supply:

1. Supply of goods or services. Supply of anything other than goods or services does not attract GST.

2. Supply should be made for a consideration.

3. Supply should be made in the course or furtherance of business.

4. Supply should be made by a taxable person.

5. Supply should be a taxable supply.

6. Supply should be made within the taxable territory

Exceptions:

(1) Any transaction involving supply of goods or services without consideration is not a supply, barring few exceptions, in which a transaction is deemed to be a supply even without consideration.

(2) Further, import of services for a consideration, whether or not in the course or furtherance of business is treated as supply.

Scope of Supply

As per Section 7(1) Supply includes

(b) import of services for a consideration whether or not in the course or furtherance of business;

(c) the activities specified in Schedule I, made or agreed to be made without a consideration; (w.e.f. 29th Aug 2018 ‘and’ omitted retrospectively from 1.7.2017)

(d) w.e.f. 29th Aug 2018, omitted retrospectively from 1.7.2017: the activities to be treated as supply of goods or supply of services as referred to in Schedule II.

w.e.f. 29th Aug 2018, applicable retrospectively from 1.7.2017

As per Section 7(2) Supply excludes

(a) activities or transactions specified in Schedule III; or

Activities specified in Schedule III (i.e. Negative list):

1. Services by employee to employer in the course of or in relation to his employment.

2. Services by court or Tribunal

3. Services by Member of Parliament and others

4. Services by funeral, burial etc.

5. Sale of land/Building

6. Actionable claim other than lottery, betting and gambling.

7. Supply of goods from a place in the non-taxable territory to another place in the non-taxable territory without such goods entering into India.

8. (a) Supply of warehoused goods to any person before clearance for home consumption;

Activities to be treated as supply even if made without consideration

1. Permanent transfer or disposal of business assets where input tax credit has been availed on such assets.

2. Supply of goods or services or both between related persons or between distinct persons as specified in section 25, when made in the course or furtherance of business:

Provided that gifts not exceeding ` 50,000/- in value in a financial year by an employer to an employee shall not be treated as supply of goods or services or both.

3. Supply of goods—

(a) by a principal to his agent where the agent undertakes to supply such goods on behalf of the principal; or

(b) by an agent to his principal where the agent undertakes to receive such goods on behalf of the principal.

4. Import of services by a (w.e.f. 1-2-2019 the term ‘taxable’ omitted) person from a related person or from any of his other establishments outside India, in the course or furtherance of business.

Part A: Format of calculation of taxable value

Particulars	Rs.
List price of goods Add: Subsidy received from a non-Government body [Since subsidy is received from a non-Government body, the same is included in the value in terms of section 15(2)(e)] Not includible: Add: Subsidy received from government [Since subsidy is received from Government body, the same is not included in the value in terms of section 15(2)(e)] Add: Add: Tax levied by municipal authorities [Includible in value as per section 15(2)(a)] Add: CGST and SGST [Not includible in the value as per section 15(2)(a)] And: Packing charges [Includible in the value as per section 15(2)(c)] Add: Late fees paid by recipient of supply for delayed payment	*** * ------------ ++++++ +++++ ++++++ ++++**
Total Less: Prompt payment discount indicating in invoice	+++++ -----
Taxable value of supply	++++++

Part B: Calculation of GST Payable:

(b) (1) Who is required to furnish annual return in GST? What is the due date for the return? 4

Ans: Meaning of Annual Return: Annual Return is the return that is required to be filed annually for every financial year by the eligible registered person, except a few specified categories of persons. It is a summary statement containing all the transactions occurred and reported in the periodical returns filed during the financial year. Further, it also captures the adjustments made to the transactions of the previous year after the end of the year. It is also the last option available with the assessee to disclose all transactions pertaining to the period of filing. Thus, we can say Annual Return is very comprehensive return.

Who is required to file annual return?

As per section 44 of the CGST Act, every registered person is required to furnish an annual return for every financial year except a few categories of persons as provided in section 44(1). Hence, there is a need to file the Annual Return by every registered person including the person paying tax under the composition scheme under section 10 of the Act.

Who is not required to file annual return?

There is no requirement to file the Annual Return by:

- An Input Service Distributor (ISD)

- A person paying tax under section 51 or section 52 (TDS / TCS)

- A casual taxable person and (CTP)

- A non-resident taxable person (NRTP)

Due date of filling annual return:

As per section 44 of CGST Act, Annual returns must be filed on or before the 31st day of December following the end of the financial year, for which the return is being filed for all category of taxable person.

(2) From the following details of Mr. Bharat a registered dealer engaged in purchase and sales of goods. Ascertain the GST liability (SGST/CGST/IGST) for the month of November 2021: 10

Ans: Only For Members

GST Law and Practice Solved Question Paper 2022 [Dibrugarh University BCOM 6th SEM CBCS Pattern]